Yearly Archives: 2020
Cash-Secured Put Writing on the iShares S&P/TSX Capped Energy ETF
Patrick Ceresna
Although the broad Canadian stock market index has almost recovered to its pre-COVID crisis high, there is one sector that has lagged badly. The energy sector has not recovered to anywhere near the levels seen in early 2020. Chart 1: iShares S&P/TSX Capped Energy ETF (symbol XEG) 2019-2020 Source: Bloomberg For those who...
Writing covered call options to generate more income
Martin Noël
With interest rates currently at all-time lows, finding ways to generate income in our security portfolios is a challenge. However, the strategy of writing covered call options (WCCO), whether applied systematically or on an ad hoc basis, allows us to generate additional income through the premiums received. This is the third...
Catching up on what you missed during our Virtual Options Education Day event
Montréal Exchange
The Canadian options market is vibrant and offers options on over 300 of TSX’s most active and liquid stocks and ETFs. Retail investors who understand how to combine stocks and options strategies have a powerful skill at their disposal. This can diversify their trading strategies to more than just going long or short....
Long Straddle with Cineplex
Patrick Ceresna
Before the corona crisis hit, Cineplex was scheduled to be taken over by UK-based Cineworld Group in a $1.65 billion transaction. Cineworld was going to pay $34 per Cineplex share. However, the closing of the Canadian economy due to the coronavirus crisis led Cineworld to claim that there had been a material adverse change...
Bear Call Spread in the XIU Market
Patrick Ceresna
The stock market has rallied a long way from the March lows. The iShares S&P/TSX Equity 60 ETF (symbol XIU) is up almost $8 from that scary day on March 23, 2020 when the market reached bottom. The rally has been steady, with few pullbacks. However, it is completely natural to expect that, eventually, there will be a...
What the Options Market Thinks About Earnings
Steve Sosnick
Use Your Interactive Brokers Trader Workstation to See What the Options Market Thinks About Earnings Expectations During earnings season, investors become justifiably concerned with analysts’ expectations for a company’s earnings and revenues. While analysts’ estimates provide an important framework for decision-making...
Selling your securities by writing covered call options
Martin Noël
Let us say you are willing to sell some securities in your portfolio, or you are considering it. Adopting the covered call writing strategy is like getting paid for making a commitment to sell the securities. This is the second in a series of four articles on covered call writing. It discusses how to use this strategy as an...
Writing covered call options: an introduction
Martin Noël
Perhaps you would like to start using options, but you do not know which strategy to implement. The simplest and most popular strategy among individual and institutional investors is covered call writing. This article is the first in a series of four articles on covered call writing. It covers the basic features of this...
Using USX options to hedge U.S. dollar risk
Martin Noël
With interest rates at historic lows, it is unlikely that the Bank of Canada will decide to raise the policy rate anytime soon. But we live in a world that is full of surprises, and things can change quickly. Events with the most unexpected repercussions can and do occur (the current pandemic comes to mind). Who really knows...
Stock Repair Strategy Using Options
Patrick Ceresna
The coronavirus crisis seemed to come out of nowhere. It caught retail and professional investors off guard equally. Almost overnight many stocks fell by more than 25%, and although some have managed to recoup their losses over the past few months, many have not. What is an investor to do in such an environment? One could...
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